Scotland's second most senior judge, the Lord Justice Clerk Lord
Gill, has produced the Scottish Civil Courts Review. This backs the
introduction of class action suits.
"However well the regulatory regimes may operate, there may
still be cases that require to be litigated and a multi-party
procedure is, in our view, an essential element of the range of
options available for the resolution of disputes involving a number
of parties with the same or similar legal or factual interests,"
said the Review. "There should be a special multi-party
procedure."
Class action suits as practiced in the US are highly
controversial. They involve the taking of a case against one
defendant on behalf of tens, hundreds or even thousands of
claimants.
Though settlements can run to billions of dollars in successful
cases, once the money has been divided thousands of times litigants
can end up with just a few dollars each. Lawyers organising the
case, though, often walk away with 20% or even 30% of the massive
payouts.
Lord Gill's Review recognised this as a danger in class action
systems. "US class actions have been criticised for being
cumbersome, expensive and ruinous for many defendants," it said.
"There have been significant battles over the certification of a
class, (‘satellite litigation’), while the costs and risks of
defending a claim are sometimes alleged to be so high that it may
be cheaper to settle (‘blackmail litigation’)."
Lord Gill said in the report, though, that a solution had to be
found to the problem of conducting cases where many people have the
same experience. Mass litigation in Scotland is possible, but
cumbersome, he said.
"Recent mass litigation in the Scottish courts has highlighted
problems arising from the lack of a formal multi-party procedure,"
he said in the Review. "The availability of such a procedure to
manage prisoners’ ‘slopping out’ claims might have reduced the
burden on the public purse and the pressure on the courts."
"The recent dispute concerning the lawfulness of bank charges
has resulted in more than 400 actions being litigated in sheriff
courts throughout Scotland. Despite the common issues these actions
raise, there are no mechanisms whereby they can be transferred to a
single court and managed as a group," the Report said.
John
Mackenzie , an expert in Scottish litigation at Pinsent Masons,
the law firm behind OUT-LAW.COM, told technology law podcast
OUT-LAW Radio that while group litigation is possible currently in
England, the possibility of taking class action suits will be
welcomed.
"The class action is a development on the English model which
allows for a group litigation order. What that allows for is the
case management of claims that give rise to a similar issue of fact
or law," he said.
"Where I think the class action has a distinct advantage is that
it comes together in a concept that people on the street will
understand," said Mackenzie. "The English procedure is perhaps
about trying to manage existing cases rather than starting with the
concept of a big group of people."
Lord Gill's report was commissioned by the Scottish Justice
Minister. The Scottish Government will decide which of his
recommendations to adopt.
Hear John MacKenzie on OUT-LAW Radio
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